Are You Covered Under Tax Audit

[ashu1234]

turnover of 1cr means profit+loss=1cr,right?

Turnover is scrip wise sum of profit and losses.
Read further here:
http://zerodha.com/varsity/chapter/turnover-balance-sheet-and-pl/

I prefer trade wise turnover, which is each trades profit and loss is summed up. One can easily do that on excel sheet by copy pasting trades and use simple forumla. For now only zerodha is claiming that they are the only one giving trade wise report at their back office, but its no big deal, i can do that in Jiffy, just need to place trades in excel.

 

[eku]

Nikhil Sir,
I e-filed return with the help of local CA(no audit case) and he said there staff will courier it.It was done on 20th Aug 2015 and status showing ITR-V not received yet.So the query-

How long does it normally take for IT Department to process ITR-4 tax return?
Do I need to resend the copy?(may be there staff didn't courier it).

 

[euclid]

Mr. Nikhil,

What are the generally accepted "cost of improvement" expenses for land that can be shown if we are selling land?

Thanks :thumb:

 

[Subhadip]

Nikhil Sir,
I e-filed return with the help of local CA(no audit case) and he said there staff will courier it.It was done on 20th Aug 2015 and status showing ITR-V not received yet.So the query-

How long does it normally take for IT Department to process ITR-4 tax return?
Do I need to resend the copy?(may be there staff didn't courier it).

around 2 months for updation in website.

No do not resend it.

 

[canikhil]

Nikhil Sir,
I e-filed return with the help of local CA(no audit case) and he said there staff will courier it.It was done on 20th Aug 2015 and status showing ITR-V not received yet.So the query-

How long does it normally take for IT Department to process ITR-4 tax return?
Do I need to resend the copy?(may be there staff didn't courier it).

wait for about 45-60 days. If still showing as not received, send again using speed post.

 

[canikhil]

Mr. Nikhil,

What are the generally accepted "cost of improvement" expenses for land that can be shown if we are selling land?

Thanks :thumb:

very limited - cost of leveling, boundary wall etc.

 

[canikhil]

I failed to add that turnover is usually above 1 cr, its very likely that most of traders cross 1 cr limit in a financial year.

My case was hypothetical but implications were practical. Bottom line trader who is trading on a capital of 2-3 lacs will naturally end up making turnover of 1 cr, its a fact. and second assumption is, in most of the cases many traders will be in a loss in a financial year, and I'm sure majority will come under both category.

So I was making a case for the majority of the community, ofcourse Audit will be required as turnover exceed, If profit, then ok, but loss there is no getaway for audit and this is where traders are left with two choices to file a return or not. I havent said a thing about compliance, but onus is left on trader to file the audited return or not, but consider the fact that on a working capital of 2-3 lacs where one is in loss you are burdening him with another 15k. If I have a loss of 20k which is very legitimate and I want to carry it forward to next year, I have to pay a CA a fees of 15k at least, which amount's to 75% of my loss. Instead I'll better forget this years loss, and start new year afresh. coz its no where written that I have to book loss and add to my sufferings by paying another 75% of my loss to my CA. Its atleast some relief that its not mandatory to show my losses too for the eyes of IT department.
And about AIR that you said, is applicable only for big fishes who have deposits of 10lacs and above in other bank accounts, and we are here talking about small traders who are trading on capital of 2-3 lacs which is again may or may not be borrowed so where comes the question of AIR.

So for legitimate traders they are off limits given they are under above criteria and it doesnt makes any sense to dig any further as they are very small fish in the ocean. I guess you cant deny that. If you still have any point to make now, I'm listening.

Hey...i am responding late on this. You need to look at the rules for AIR. Rs 10 lakh deposit is just one parameter. The parameter that applies to stock markets is STT and CTT under different categories and notices have been issued on these parameters.

Even for contracts more than Rs 10 lakhs in Commodities attract AIR. With regards to claiming losses or not. You are correct that claiming loss or not is your wish. But getting the audit done or not is not optional.

 

[eku]

Nikhil Sir,
I e-filed return with the help of local CA(no audit case) and he said there staff will courier it.It was done on 20th Aug 2015 and status showing ITR-V not received yet.So the query-

How long does it normally take for IT Department to process ITR-4 tax return?
Do I need to resend the copy?(may be there staff didn't courier it).

CA's staff didnt courier ITR-V,my doubt was valid.I phoned them and they said that they couriered it.
Finally got a SMS from IT Dept that ITR V has not been yet submitted.I ran urgently for speed post.

Now,Happy to see the status- ITR V received after the due date

Though its a small thing,it cause me a pain..It happens in India all the time.They(Pro's like CA's,Doctors etc) always hire cheap labors(cheap talent).
(facepalm) and they commit such mistakes here n there and thus,aam aadmi suffers a lot.

Changing CA,is the option left with us.

 

[mutualguru]

Well the annual tax return season is just about to start and its the right time for you to evaluate whether you are supposed to anything more than just filing your tax returns.

This posts attempts to cover the issue of applicability of tax audit under various circumstances.

Till a few years ago, applicability of tax audit was a simple issue: If your turnover crosses a particular limit, you were required to get your accounts audited. However, since the introduction of refurbished Section 44AD, the applicability of audit has become a cumbersome issue.

So to make it easier for you all to know whether tax audit is applicable to you or not, I have shared below a few simple examples. (these examples have been shared at an earlier discussion in this forum too)

Case 1.

Turnover : Below Rs 1 cr
Gains/Loss from Business: 240000
Salary Income: No
any other income: Nil

Audit not required as condition of income exceeding maximum exemption limit not fulfilled

Case 2

Turnover: below Rs 1 cr
Gains: Rs 50000 (assumed)
Salary: Rs 250000

Audit required as condition of income exceeding maximum exemption limit and profit less than 8% fulfilled

Case 3

Turnover: Below Rs 1cr:
losses: 5 lakhs (assumed)
Interest Income: Rs 5 lakhs

Audit not required as losses will get set off against Interest income resulting in maximum income not exceeding maximum exempted limit.

In the above case, had the interest income exceeded Rs 7.5 lakhs, the audit would have become applicable.

Case 4

Turnover: Below Rs 1 cr

losses 5 lakhs (assumed)

Interest Income: Rs 2.5 lakhs,

Salary: Rs 3 lakhs

Audit required as only Rs 2.5 lakhs losses are set off against interest and remaining losses are to be carried forward (set off against salary not allowed). So income exceeds exempted limit.

Case 5

Turnover: Below Rs 1 cr

Speculative Losses: 2 lakhs

Interest Income : Rs 2.6 lakhs,

Salary: Ni

Audit required as speculative losses cannot be set off against interest income and both the conditions : income exceeding basic exemption limit and profit less than 8% are satisfied.

Case 6:

Turnover : Above Rs 1 cr. Don't bother. Audit is compulsory.

Kindly note that in the above examples it has been assumed there are no deductions available under section 80C, 80D etc.

Regards

Nikhil Kaushik

Dear Nikhil,

what about this situation

*Yearly
Turnover : Below Rs 1 cr
Gains from Trading Futures: 30,000
Salary Income: 2,30,000
any other income: Nil

 

[canikhil]

CA's staff didnt courier ITR-V,my doubt was valid.I phoned them and they said that they couriered it.
Finally got a SMS from IT Dept that ITR V has not been yet submitted.I ran urgently for speed post.

Now,Happy to see the status- ITR V received after the due date

Though its a small thing,it cause me a pain..It happens in India all the time.They(Pro's like CA's,Doctors etc) always hire cheap labors(cheap talent).
(facepalm) and they commit such mistakes here n there and thus,aam aadmi suffers a lot.

Changing CA,is the option left with us.

Dear Eku,

Well I won't comment on this but would say that often CAs are themselves hired like cheap labors!

anyways, even if the CA has made the mistake, I would suggest that you kindly file a revised return at the earliest.